Industrial Development in Pakistan during Different

Decades

1- From Partition to 1950:

At the time of partition industrial sector was only 4% of total
industrial network.
Mainly comprised of Jute in East Pakistan and Cotton ginning
factories in West Pakistan.
Development Board established in 1948.
Industrial Finance Corporation & Industrial Investment and
Credit Corporation in 1948.
Grant of Liberal Concessions to industrialists.
Allowed to set up all industries except ammunition, telegraph
and telephone.etc.

2- During 50s:
Indirect taxes were imposed, industrial activity handicapped.
Agriculture inputs remained low.
1952 establishment of Pakistan Industrial Development
Corporation .
To provide financial & technical assistance towards those
sectors where private sector was reluctant.
Industrial units of paper, jute, sugar, cotton and cement
were sent to private sector by PIDC.
1972: Role of PIDC shrunk after nationalization.

First 5 Year Plan (1955-60)

Objective: Increase output by 60%
By increasing production of cotton, cloth, natural gas,
sugar, cement, fertilizers etc.
Increase in production of sugar & cotton cloth.
Decrease in production of fertilizers, natural gas, &
cement.
Plants of paints, cycle tyres, glass etc.
GNP: Increase from 9.7% (1954-55) to 11.9% (195960).

3- During 60s:
2nd 5 year plan.
Concessions to private sector in tax exemptions, reduced
wages, export bonuses, tax holidays.
161.4% increase in industrial output.
Following the advice of Harvard Group of Economists great
increase in industrial production.

3rd Plan (1965-70)

Target regarding industrial sector not achieved.
Shortage in production of sugar & cement.
1965 war and 1968`s coup in East Pakistan and
protests against Ayub Khan caused economic and social
unrest.
Growth Rate: 7.8 %.( far below from 10%).
No increase in efficiency, performance remained
quantitative.
1972: Export bonus scheme abolished.
7% contribution to GDP by manufactured goods in 196364.
1960`s led to monopoly power & concentration of
wealth in few hands.
66% industrial assets & 87% banking n insurance
assets with 22 families.
Dr. Mehbub ul Haq explained the concentration of
industrial and manufacturing assets in hand of few families.
1960`s: Unequal distribution of income in the country.

4- During 1970`s:
Separation of East Pakistan.
Nationalization of 31 manufacturing units.
52 industrial concerns under PIDC also nationalized.
1972: Board of Industrial Management set up.
1973: Oil crisis increased cost of production.
Machinery and plants had gone obsolete.

 Decline in overall profit margins, production, productivity

and efficiency.
Nationalized units became burden on state.
Devaluation of rupee in 1972.
Multiple exchange rate system abolished.
Suppressed inflation.
Tax rebates withdrawn.
Brain drain of skilled workers.
Employment enhanced but no effect on productivity.
Increase in government expenditures.
Labor disputes & severe tension bet. Labor and
private producers.

5- During 1977-80:
Zia ul Haq regime.
Beg Report:
BIM & Ministry of production to be abolished.
Decrease in no. of enterprises from 69 to 24.
Sector corporations abolished.
Super Ministerial Board established.
Auqeeli Report:
No. of corporations decreased.
Not in favor of super-ministerial board.

1978: Economic Reform Ordinance issued.

BIM abolished.
Flour mills, ginning mills and rice husking given to
ex-owners.
Brought financial & Managerial Changes.
Sparing surplus labor.
Unnecessary expenditures to an end.
Restrictions to trade union.

6- During 1980s:

5th Plan (1978-83)

Industrial growth at 10%.

Production of complex products.
Private investment 50%.
Projected increase in fixed investment in 197778 from 16.5% to 19.8% in 1982-83.

6th plan (1983-88)

Manufacturing sector growth rate 7.7%.